Quiz-Chapter 2. The Enemy

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Question 1 of 22

1. Question
How often do you want to review how the company is doing?
- Reviewing on an annual basis is best.
- Reviewing on a monthly basis is best.
- Reviewing it on a weekly basis is best.
- Reviewing on a quarterly basis is best.
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Question 2 of 22

2. Question
What would happen if you could only find out if you were making any money every 3 to 4 months or so?
- You would have time to make corrections before the end of the year.
- You would know what to report on your taxes.
- You would be too late to make the correct decisions.
- You would make a good guess about how many crew members you needed.
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Question 3 of 22

3. Question
What is the one thing that is always missed in any estimating program or contracting system?
- Sales tax
- Sales commissions
- Time
- Overhead
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Question 4 of 22

4. Question
What is the fallacy about a job being able to cover Overhead and produce Net Profit?
- It cannot. It only produces Overhead.
- It cannot. It only produces COGS.
- It cannot. It only produces Gross Profit.
- It cannot. It only produces Crew Wages.
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Question 5 of 22

5. Question
How do you run a business by the week?
- Review the week every Sunday night before the next week begins.
- Review the week every Wednesday morning and make adjustments as needed in your plans for the next two days.
- Pick a start day and an end day, review the week and make adjustments as needed in your plans.
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Question 6 of 22

6. Question
What is the crew’s job and what is the manager’s job in relation to profits?
- The crew’s job is to get the job done in whatever time frame works for them and the manager’s job is to watch over the crew and Gross Profit will happen.
- The crew’s job is to produce Gross Profit and the manager’s job is to turn it into Net Profit.
- To make Gross Profit, the crew just needs to arrive on the work site and the manager’s job is to make sure materials arrive.
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Question 7 of 22

7. Question
Why can’t you just run the budget by the year?
- It is impossible to predict what will happen over one year.
- It is risky business.
- Using last year’s Overhead to budget for this year – up or down – is like using crystal balls to predict the future.
- All of the other answers apply.
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Question 8 of 22

8. Question
What does it mean if your Gross Profit is greater than your Overhead for the week?
- The crew can take a week off.
- The crew gets a bonus for the week.
- You made a Net Profit for that week.
- You had a Break Even week.
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Question 9 of 22

9. Question
What is the game of the company then?
- To hire as many crew members as possible to build a big company.
- To not take on more expenses that add to your Overhead.
- To make a Net Profit every week.
- To keep the crew and staff happy.
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Question 10 of 22

10. Question
TRUE or FALSE?

To make a weekly Net Profit, you need to know your Weekly Overhead, so you know when you have it covered.
- TRUE
- FALSE
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Question 11 of 22

11. Question
TRUE or FALSE?

The reason a single job installed CANNOT give you a Net Profit is because Net Profit is a function of time, and jobs can only produce Gross Profit.
- TRUE
- FALSE
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Question 12 of 22

12. Question
When will bonuses and pay raises come?
- At Christmas time and the beginning of the New Year.
- When the crew has demonstrated they can arrive on the jobsite on time for 3 months.
- If there is a Net profit being made.
- When the crew manager feels happy with the crew.
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Question 13 of 22

13. Question
How should a manager divide up the Gross Profit (Job Profit) that needs to be made for the week?
- Divide the Gross Profit (Job Profit) by the number of jobs planned for the week.
- Divide the Gross Profit (Job Profit) by the number of office staff.
- Divide the Gross Profit (Job Profit) by the number of crew members.
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Question 14 of 22

14. Question
What is an economic engine?
- It is what drives the business and is the key ratio one uses to measure the success of the business.
- The accounting department is the economic engine of the business.
- An effective marketing plan is the economic engine of the business.
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Question 15 of 22

15. Question
What is GPMD?
- The Gross Profit (Job Profit) per Month and Day calculated at the end of the year.
- The Gross Profit (Job Profit) and how Many Days it took to earn it.
- The Gross Profit (Job Profit) each Man earns in one working Day (8 hours).
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Question 16 of 22

16. Question
What is the economic engine of a construction company?
- GPMD
- A strong desire to have nice things.
- The manager’s ability to make people work hard.
- A good accountant.
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Question 17 of 22

17. Question
TRUE or FALSE?

A crew member needs to know what his portion of the Overhead is in terms of GPMD, and what GPMD he and his crew must consistently make for the company to be profitable.
- TRUE
- FALSE
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Question 18 of 22

18. Question
How much GPMD should you allocate to each man?
- 10% added to the cost of labor for each man.
- Divide the total Overhead and the amount of Net Profit you need to make by the number of men.
- You would ask each man how much he thought he could produce for a day.
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Question 19 of 22

19. Question
What would the Net Profit be?

A job is estimated to take 1 week and this is the only job the company has.

Data:

The contract price is $10,000

The COGS

Labor is $1200 a week

Materials is $1800

Commission is $500

The Overhead is $4,000 a week
- $2,500
- $500
- $1,500
- $2,000
Correct

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Question 20 of 22

20. Question
What would the Net Profit be?

A job is estimated to take 1 week and this is the only job the company has.

Data:

The contract price is $50,000

The COGS

Labor is $10,000 a week

Materials is $25,000

Commission is $2,000

The Overhead is $10,000 a week
- $2,500
- $1,500
- $3,000
- $2,000
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Question 21 of 22

21. Question
A job is estimated to take 5 days and this is the only job the company has and the job is completed two days early. The crew was able to go to a new job the remaining 3 days that week and made the same GP at the second job as it did on the first one.

Data:

The contract price is $30,000

The COGS

Labor is $2,000 a day

Materials is $10,000

Commission is $1,000

The Overhead is $15,000 a week

WHAT IS THE NET PROFIT?
- $11,000
- Minus $2,000
- $4,500
- $6,000
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Question 22 of 22

22. Question
A job is estimated to take 5 days and is the only job the company has. However, the job is completed in 6 days. The company works 6 days a week.

Data:

The contract price is $30,000

The COGS

Labor is $2,000 a day

Materials is $10,000

Commission is $1,000

The Overhead is $15,000 a week

WHAT IS THE NET PROFIT?
- $2,000
- Minus $8,000
- $1,000
- Minus $5,000
Correct

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Quiz-Chapter 2. The Enemy

Quiz-Chapter 2. The Enemy

Quiz-Chapter 2. The Enemy

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